Estimating capital and operating costs

CapEx and OpEx numbers come from NREL

We rely on the latest NREL numbers for CapEx and fixed OpEx (the Electricity Annual Technology Baseline dataset). These are used to calculate cashflow, NPV (Net Present Value) and IRR (Internal Rate of Return) values.

Thermal plant operating costs are cyclic; battery operating costs are not

We use NREL data for each technology's fixed annual operational cost. Next, we add scheduled maintenance - some years require more maintenance than others. For example, we expect the most significant CCGT OpEx cost to be major inspections and overhauls of the gas turbine, which are typically undertaken every sixth year. So, for CCGTs, OCGTs, and gas reciprocating engines, we take the fixed OpEx value and scale it by a maintenance schedule, as shown below. This uses the start year of each plant to assess when the significant cost will fall.

Battery storage OpEx is defined at a fixed level each year, but future batteries have lower operating costs than earlier ones.

Once we have fixed OpEx and CapEx values, we can calculate cashflows.